Portugal Wants Large Telecom with Brazil to Promote Portuguese Language

Portugal Telecom headquarters Portugal's prime minister, José Sócrates, defended the creation of a large Portuguese and Brazilian telecommunications company to defend and promote the Portuguese language worldwide and said that Portugal Telecom (PT) "is in Vivo to stay", according to Agência Lusa.

Vivo, controlled by PT and by the Spanish Telefonica, is one of the main mobile telephony companies in Brazil.

"Yes, I believe it. That was what I was referring to," stated José Sócrates, about whether he defends the establishment of a large Portuguese-Brazilian telecommunications company and referring to an address he had given minutes earlier, during the ceremony for signing of a protocol between Portugal Telecom and Bahia state.

Noting the existence of a "dispute" between the main languages in the world, José Sócrates added that "it is the state's obligation to promote a language," something which "should also be done through partnerships" between telecommunications companies.

"The Portuguese language is the most important asset we have, the greatest," said the prime minister, adding that it is the "responsibility of all" to defend and promote the maternal language.

Without specifying whether the creation of this great player should take place through consolidation or strategic partnerships between sector companies, José Sócrates returned to stating the need to establish a company that may compete with the large sector giants on the international market.

Before that, during his participation in the ceremony and addressing an audience of Brazilian journalists and politicians, Sócrates nicknamed Portugal Telecom the "jewel of the crown" among companies in his country, guaranteeing that the operator led by Zeinal Bava – in which the Portuguese government has a 'golden share' that guarantees special rights – "is in Vivo and in Brazil to stay". "The responsibility is large and starts in telecommunications," he defended.

This statement was made at a moment in which the future of the partnership between PT and Telefonica in the control of Vivo seems uncertain, due to the support of the Spaniards to the takeover bid by Sonaecom over PT, in 2006, which practically reduced the strategic partnership between the two Iberian operators to a convenience marriage. Both PT and Telefonica refused to sell their half of Vivo, stating, on the contrary, that they were buyers.

Sócrates' statements, therefore, represent a clear signal of public support of the Portuguese executive to the refusal of selling the Portuguese half of Vivo to the Spaniards, an operation that is defended by the hardcore shareholder group at the operator.

On the other hand, analysts who follow the sector believe that a new Brazilian telecommunications group that is going to be born with the merger of Telemar (Oi) and Brasil Telecom could be an alternative for PT investment, through exchange of participation, a movement that the government of Brazil has already said it would consider with appreciation.

Another possible scenario is the purchase of TIM Brazil from Telecom Italia by Telefonica, which has disclosed as a possibility by the Italian press and would oblige the Spaniards to leave Vivo, opening way for a takeover by PT.

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